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Brian and Kay Irvine in their Ottawa home, originally built by Kay’s family in 1949. ‘The plan is to stay as long as we can,’ Mr. Irvine says.

Cole Burston/The Globe and Mail

For nearly 40 years Brian and Kay Irvine have lived in their Ottawa home, which her parents built in 1949. The grandparents of five, who are both in their 80s, can't see themselves living anywhere else.

"It's a good house, it's in a good location, and it's close to everything we need." Mr. Irvine says. "The plan is to stay as long as we can."

Downsizing has never appealed to either Mr. Irvine, a former high-school history teacher and vice-principal, or his wife, who worked as an architect when she wasn't raising their two children. Although it's one and a half storeys, they could live on one level if they needed to. Their neighbours help shovel the walks, and the couple has hired someone to tend the garden. Occasionally, they get help with housekeeping as well.

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While the Irvines are able to stay in their home, many Canadians find they have no choice but to put their property on the market and use the proceeds to fund a decades-long retirement. Yet for all the talk of retirees using their residence as their nest egg, financial planning often overlooks another element behind the decision to hold onto the house: the psychological factor.

"Quite often the easiest solution when people are getting on in years is to sell the home, because that's where the bulk of the equity is," says portfolio manager Darren Coleman, senior vice-president, private client group, at Raymond James in Toronto.

"It's a simple math problem, but this isn't really a math problem. This is a lifestyle decision. It's a very significant emotional decision for people, and it's one that must be respected and understood before you ever get to the math problem.

"A home isn't just a place with a roof over your head," he adds. "It's family, it's memories, it's sadness, it's joy, it's our children growing up, it's our first Christmas together, it's where we held each other when mom died. It's all these things. How do you leave that? It's a part of you."

The emotional significance of owning a home may be even more pronounced among those who grew up during the Great Depression or heard their parents talk about how difficult it was. For many, home ownership is the ultimate in security.

"For them, owning their home was a major financial goal that they achieved," Mr. Coleman says. "A home means stability and safety for that generation in a way that no subsequent generation fully appreciates. Nowadays people are running around buying starter homes and flipping properties; a home is just a thing that doesn't have near the same emotional weight. They're so much easier to get today that homes don't resonate in the same way."

While certain health conditions make it impossible for people to stay at home – mobility issues typically mean multiple levels or a large lot with extensive landscaping are out – other times individual circumstances result in people wanting to remain in place more than ever. Mr. Coleman recalls one client whose husband had developed Alzheimer's disease, and she felt that it would be far easier for both of them to cope if he remained in familiar surroundings.

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There are also times where the math works in people's favour to stay at home rather than downsize to a condominium, argues Sherry Cooper, chief economic counsel to MDC Partners, a global strategic marketing company.

"Holding onto the house isn't an irrational thing to do," says Ms. Cooper, author of The New Retirement: The Economic Implications of Retiring in an Aging Society.

"For many people, downsizing would be more expensive. … The square-foot costs of a condominium are in fact higher than a home. If you're willing to move far away – say, from the GTA you're willing to move to Barrie or beyond – there's no question you could probably downsize and actually take some money out of your home. But if you want to stay in the same location you can't expect you're going to use your home to pay for long-term costs, and that's problematic.

"Where you live is a lifestyle decision, not just a financial decision," she says. "It's a very personal thing. A lot of older people feel more comfortable being where their memories are. … People like to stay where they're comfortable. There are lots of hidden costs in moving, too."

To assist clients in determining where they'll live in their later years, Mr. Coleman draws on insight he gained from the Massachusetts Institute of Technology AgeLab, a research centre based within MIT's School of Engineering.

One of two Canadian financial advisers invited to visit the lab, Mr. Coleman incorporates into planning three key retirement-related questions: Who will change your light bulbs? Who will you have lunch with? And how will you go to get ice cream?

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Combined, the queries address how people plan to meet basic day-to-day needs, maintain their social connections, and get around.

"On a beautiful sunny day when you want an ice cream, if you're 47 you just go out and get one," Mr. Coleman says. "But if you're 86, how are you going to do this? Can you still drive? Are there people who can drive you? Is there a public transportation system nearby?

"Those questions are all metaphors for what the last 10 years of your life are going to be like and the challenges you're going to face," he says.

Ideally, the question of whether to be or not to be in the family home is one that would encompass both financial and psychological reasoning.

For the Irvines, staying at home is the obvious answer. When the time comes that their needs are greater, they'll find ways to address them, whether it's more hired help or the good will of others, such as friends from church or the neighbours who shovel their driveway.

"It's comfortable, and it serves our needs," Mr. Irvine says of his home. "You can always get somebody to give you help. You can put in a chair lift if you need to. There are lots of things you can do to work things out. We want to be here.

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